You have heard this before, and you'll probably hear it a thousand times more… Vancouver is expensive, especially real estate! We asked plenty of international students from our community what some of their biggest pains were. Although we received many different replies, there was a constant one. "How expensive this city is!" was quoted by all International Students since the beginning of time.
Vancouver's real estate market is messed up. It's really messed up. Much so that it's attracted a lot of attention from both local and international media. It has been ranked as one of the most expensive cities when it comes to real-estate plenty of times in the past few years. Currently, in 2022, Vancouver ranks as the 3rd most expensive city in the world for real estate, just behind Sydney and Hong Kong. (Demographia International Housing Affordability report, 2022).
But why is it like that? What's the reason for such a high cost of living Vancity? Well, here's why.
As with anything else when it comes to economy and real estate, there isn't just one reason behind the high costs of this city; it's multi-factorial, especially in such a modern time in which globalization's impact is seen on a daily basis. However, we are able to identify what we consider the most significant contributor to this factor: Foreign Investment.
It is not very Canadian of us to discuss the fact that immigration can bring with it some negative aspects, mainly because Canada takes great pride in being such a diverse and welcoming country for immigrants. Still, the reality is that everything can have a downside, and, in Canada, the downside of immigration has been the rise in prices in every major city. That is why Vancouver, Montreal and Toronto are frequently not far from each other in the "expensive cities" rankings.
But the truth is that the Vancouver real estate market has felt the impact of foreign money—particularly money from wealthy foreigners. Much of which comes from Asia, particularly mainland China. Not a very Canadian thing to say, we know, but it's true. How do we know? Because this situation has been tracked, studied and recorded
Dr. David Ley, from the University of British Columbia (UBC), has been doing extensive research over the past few years. And the data collected by Dr. Ley shows how over the last few decades, metro Vancouver has become similar to other Pacific Rim "gateway" cities, such as Hong Kong, Singapore, London and Sydney. Each of these gateway cities has rising housing costs fuelled by high immigration-driven population growth and foreign investors.
Sticky note: Did you know that Vancouver's median house price would cost a buyer 13.8 times the median income? 😵
In fact, Canada opened in the past years' immigration programs based on investment! Which, of course, was the perfect incentive for foreigners to continue investing in Canada. They would get in return the promise of living in a first-world country, as they would receive along their investment the proper papers for them and their families to live here.
Through his analysis, Dr. Ley discovered that in the last 25 years, there's been an almost 1-to-1 correlation between Vancouver's rising real estate prices and the surge in international immigration and offshore investors to this West Coast city.
But what does this mean for international students?
High demand in the accommodation market! This means high rents, over-priced places or rooms and a lack of options. It means that, sadly, most students need to lower their expectations or standards to continue their Canadian dream.
Right now in Vancouver, renting just a room, that can even be sometimes shared (not the whole place), costs around $800 to $1000 on average. Which is a lot of money for international students! Especially because they are only allowed to work part-time during their studies. This pushes students to, somehow, make sacrifices to afford these high prices.
Resulting in undesirably increasing their rent budget, living with roommates, living further away from their school or even avoiding going out with friends for a beer. They must make these sacrifices. Otherwise, they would run out of money :( #truestory *We actually wrote an article about things you could do to afford living in this city.
But don’t feel overwhelmed as there’s hope! Most students, when they are patient enough, they overcome this period of their student life. After not being able to live as they would like, they find opportunities and improve their lives.😉
We commonly hear success stories of students having a 180-degree change in their lives just 1 year after they’ve finished their studies! They are able to afford a better place, or even own a car. Plenty of them also have gotten the PR in just that short period of time too!
So keep your head high and be patient, as this is all part of the journey of being an international student.
Share with us your experience with Vancouver housing on our Slack community.